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. Last Updated: 07/27/2016

Gazprom Says It Will Work On Iran Fields

Gazprom has agreed to develop more phases of Iran's giant South Pars gas field and enter the country's oil sector, the firm said on Tuesday.

New investment by a Russian energy firm is unlikely to be well received in the United States, which has been seeking to isolate Iran over its nuclear ambitions and has been urging foreign firms to cut business ties.

Gazprom said in a statement the deal was clinched on Tuesday at talks between chief executive Alexei Miller and Iranian Energy Minister Gholamhossein Nozari. It did not give any figures for investment commitments.

"The two sides have agreed jointly to develop two or three blocks of South Pars as well as Gazprom Neft's participation in oil production projects in Iran," the statement said.

Gazprom is already involved in phases two and three of South Pars together with France's Total and Malaysia's Petronas.

Iranian officials could not be reached for immediate comment.

Iran holds the world's second-largest gas reserves at 28 trillion cubic meters compared to 47 trillion in Russia.

Iran produces 100 billion cubic meters of gas per year, less than one-fifth of Gazprom's production of 550 bcm, but has ambitious plans to grow output further, mainly through larger output from South Pars, believed to be the world's largest gas field.

The agreement takes place as Iran is calling on Russia to set up an OPEC-style gas cartel.